Top Child Trust Funds Article Discussion Area

seanhodges

wobblegobble wrote: »

I think the minimum monthly investment is not compulsary so you can just switch your current investment into the stakeholder product. That's what I was told today when I phoned them but might be mistaken.

Thanks for that - all the paperwork was ambiguous on that (probably deliberately).
I have decided to switch to F&C's stakeholder CTF, partly for the convenience and partly to ensure that they continue to suffer the costs of running the account (what they really want is for us to transfer to another provider and save them the hassle).

This investment has sucked up more of my time than any other financial transaction I have researched. I guess it's partly because no-one wanted the business, so put little effort into advertising, but it was also very difficult to find out the true charges for the accounts on offer - which can make all the difference to the outcome with small investments.

Reaper

jimjames wrote: »

Has anyone been advised that their charges will be over 1.5% when this is taken into account? If so it would be worth challenging F&C. If no joy then it should be raised as a complaint all the way.

I'm afraid the 1.5% only applies to Stakeholder CTFs which is why if you switch to the Stakeholder version you will be OK, but not if you stay in their "Shares" CTF.

Personally I have quite a bit saved up in it and am happy with the performance of the funds so will be sticking with them, but certainly those with only the government voucher invested need to move before the first charge becomes due.

dad62 wrote: »

I think the letter is very underhand as it makes no mention that changing providers is an option.

They do mention their web site for more details which does have a list of options:
http://www.fctr.co.uk/changes/changesctf/options.html
but they do seem to have overlooked staying with F&C and switching to the Stakeholder.

brionz

Reaper wrote: »

There are no fees to transfer out of either type of CTF (see p.18 of T&C), other than the normal bid/offer spread which occurs whenever buying and selling shares.

According to my letter, rather than charging a fee, F&C are actually paying us to transfer to another provider by boosting the transfer value by £20. For someone like me who's child was born when the government were only giving out £50 vouchers, a £20 boost is like a 40% interest payment. Result! How long would it have taken otherise to increase a £50 investment to £70?

slinkoff

I contributed to my first child's CTF for a year before investing elsewhere so I don't have a massive amount in there. I think I'm going to switch to The Share Centre (can't post link as a new user). Their 0.5% rate seems pretty decent.

snowcat53

Reaper wrote: »

If my quick and dirty calculations are correct...
If you stick with F&C and are invested in their cheap F&C Investment Trust fund then you will still be better off than a competitor charging the standard 1.5% if the value of your investment is £4000+

Those with less could switch to a stakeholder with another company all of which seem to charge the maximum 1.5% but they tend to only offer trackers, or switch to a cash CTF:
http://www.lovemoney.com/news/savings-investments-pensions/childrens-savings/18187/the-top-child-trust-funds

Reaper - thanks for this. I have struggled to find clear figures for the TERs on the shares and stakeholder CTFs.

Just checked and it looks like the Shares account with the F&C Investment Trust is 0.92% fund annual (ref -Dec 2012 factsheet) plus a management fee of 0.365% = 1.285%

So the fund charge looks much higher than the 0.35% when you looked at it, and I am sure they were not this high before - the same seems to apply to their other funds,

In the light of this your conclusion may need reviewing!

Tarquinius

snowcat53 wrote: »

Just checked and it looks like the Shares account with the F&C Investment Trust is 0.7% 'plan charge' + 0.92% fund annual (ref -Dec 2012 factsheet) plus a management fee of 0.365% = 1.965% !
!

Thanks - but where did you see the info on the Shares account having an annual 'plan charge'?

The page I found on the F&C website states 0% annual plan charge on the Shares account - with the only charges being the underlying investment trust charges (plus 0.5% stamp duty) - and of course our new £25 per annum charge.

The 0.7% plan charge only applies to the Stakeholder CTF if I'm right, and when added to the 0.3% fund charge for the FTSE tracker fund (the only fund available in the Stakeholder) that gives a total charge of 1.0% for this option.

That's still too much as a total charge for a tracker though - I'm quite tempted to transfer Cash CTF option of 3.05% with Furness BS and just write off this investment as a bad decision all round.

I wish I'd never put any extra cash into the CTF - knowing what I know now....

This comes from the following page:

http://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/child-trust-fund/

Not sure if I've misunderstood though...?

snowcat53

Further to the discussion as to whether the CTF Shares account is more expensive than the Stakeholder, I have gone back to some old factsheets re the fund charges and management fees for the F&C Investment Trust (which is the usual choice for the Sharess account.
This is what I found

Date/ Total expenses /Mgt fee rate
Jan 2007/ 0.45% / 0.15%
Jan 2009 /0.53% /'fixed fee £6.1 m pa'
Dec 2012 /0.92% (ongoing charges)/ '0.365%

The total cost now for the Shares account with this fund is therefore 1.285%. plus the new annual fee
For the Stakeholder the cost is 0.7% plan charge plus the Allshare tracker charges which are not stated (that i can see) but total charge capped at 1.5%. I might bet they are charging the full 1.5%.

So there seems no doubt that the F&C IT expenses have increased dramatically (more than doubled) in 6 years. I am sure this has never ben flagged up in any of their bumpf.
Am i minsinterpreting? Can they justify this?

I have previously been viewing F&C as a cheap S&S CTF account but this changes my view.

There are two parallel threads going on re this topic so I am posting in both.

snowcat53

Tarquinius wrote: »

Thanks - but where did you see the info on the Shares account having an annual 'plan charge'?

My mistake - sorry . I have corected in my earlier post now

snowcat53

Tarquinius wrote: »

the 0.3% fund charge for the FTSE tracker fund (the only fund available in the Stakeholder) .

http://www.fandc.com/uk/private-investors/savings-plans/savings-plans-range/child-trust-fund/

Ah thanks for this, but are you sure - I still cannot see this figure

Tarquinius

snowcat53 wrote: »

Ah thanks for this, but are you sure - I still cannot see this figure

I found that elsewhere. I found this factsheet on the F&C FTSE All Share Tracker - which is the fund F&C use for their Stakeholder CTF (though its quite possible its not up to date!) which suggests a 0.3% Annual Charge I think.

Strangely on the F&C website I couldn't find any info at all about their Tracker Fund - could it be that they don't want to publicise it because they prefer investors to go for their managed ITs, which of course bring in higher charges.

I'm in a real quandry now as to whether to go for the F&C Stakeholder (which I don't want to after the way we've been treated - and investing in a FTSE tracker and total charges approx 1%) - or whether to just ditch this and move to a Cash ISA.

I looked at the Share Centre S&S CTF, but in my circumstances I don't think I'm any better off, as it looks like it has a £10+VAT annual management fee, plus underlying fund charges, plus £7.50 minimum dealing fees, which isn't great if you have a small pot and want to invest the odd £100 at xmas and birthdays - IMHO.

Are there any other options out there?